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(From Reinsurance)
Byline: Isobel McCalman.
The second Reinsurance summit took place in New York. Another leading group of industry executives in the reinsurance sector gathered to discuss the market and how it may develop.
The discussion initially considered some of the trends that are emerging in the sector, in the context of a market that can no longer rely on the returns from the equity market and is now increasingly dependant on underwriting basics. It was argued that the market differentiates too much on price and that companies need to use true underwriting discipline as a business strategy. However it was also pointed out that this has to be balanced with growing the business.
This was put in the context of the current state of the rates which were considered 'adequate' and likely to stay firm for the next renewal season.
However, one contributor warned that the effort of building up soundly underwritten business could be threatened if rates softened after two years.
It was then suggested that this is only one side of the business challenge facing reinsurers and that the drive to build up capital also needs attention.